ZIMBABWE – Economic slowdown has forced the government to swallow its pride and embrace reforms prescribed by the International Monetary Fund (IMF) despite President Robert Mugabe’s views that the global lender is inconsequential to the needs of developing countries.
The re-engagement with IMF has seen Zimbabwe religiously meeting the quantitative targets set under the supervised economic reform plan, Staff Monitored Programme (SMP).
The re-engagement started during the life of the inclusive government and has been accelerated since 2013, culminating in a successor economic reform plan.
At a roundtable discussion on Zimbabwe’s re-engagement, Finance minister Patrick Chinamasa said discussions with IMF had been brutal, frank and cordial, lashing out at critics of the SMP.
“I don’t think we should be apologetic for seeking to become sound managers of our economy. What would you criticise if we agree that we will spend more on infrastructure and social services?” he said.
“To the critics, let’s zero in on the policies. Don’t politicise the discussion. Let’s dwell on the policy.”
IMF has in the past advised government to cut the share of wages on recurrent expenditure, saying the spending was crowding out spending in capital projects.
The advice has been ignored until the advent of the multicurrency regime which meant that government could not resort to the printer to finance critical needs.
Zimbabwe has had a love-hate relationship with the Fund since becoming a member in February 1995.
In 2005, Mugabe told visiting journalists from Kenya that the IMF was useless in the reconstruction of the country’s economy.
“I have no faith in them [IMF]. We can do our own thing without the IMF and the rest,” said Mugabe.
“They come in with their balance of payments assistance; yes we need that at times. But their prescriptions, they are awful, believe me.”
Zimbabwe has been in continuous arrears to the IMF since February 2001. It has been making token payments and managed to reduce the debt to about $45 million as at August 31.
In 2005, Zimbabwe escaped expulsion from IMF after hastily making a payment of $120 million, a week before IMF was supposed to meet to expel the country.
Despite a stay of execution, Mugabe poured his heart out days later.
Arriving in Cuba en route to the United Nations, Mugabe rubbished IMF as inconsequential to the needs of developing nations
“Well, the IMF has always never been of real assistance to developing countries.
“It is wielded by big powers; we have never been friends of the IMF and therefore in the future we shall never be friends of the IMF,” said Mugabe.
Mugabe toned down last month saying his “government values re-engagement of the Western world in the Zimbabwe economy”.